The Economic Geography of Talent

Abstract

The distribution of talent, or human capital, is an important factor in economic geography. This article examines the economic geography of talent, exploring the factors that attract talent and its effects on high-technology industry and regional incomes. Talent is defined as individuals with high levels of human capital, measured as the percentage of the population with a bachelor's degree and above. This article advances the hypothesis that talent is attracted by diversity, or what are referred to as low barriers to entry for human capital. To get at this, it introduces a new measure of diversity, referred to as the diversity index, measured as the proportion of gay households in a region. It also introduces a new measure of cultural and nightlife amenities, the coolness index, as well as employing conventional measures of amenities, high-technology industry, and regional income. Statistical research supported by the findings of interviews and focus groups is used to probe these issues. The findings confirm the hypothesis and shed light on both the factors associated with the economic geography of talent and its effects on regional development. The economic geography of talent is highly concentrated. Talent is associated with the diversity index. Furthermore, the economic geography of talent is strongly associated with high-technology industry location. Talent and high-technology industry work independently and together to generate higher regional incomes. In short, talent is a key intermediate variable in attracting high-technology industries and generating higher regional incomes.